Wsfs Financial Corporation · NASDAQ:WSFS
Wsfs Financial — Q4 2022 Earnings Presentation
33 slides from Wsfs Financial's earnings presentation, Jan 27, 2023
Slide 1: WSFS Financial Corporation 4Q 2022 Investor Update
WSFS Financial Corporation 4Q 2022 Investor Update February 2023 1
Slide 2: Forward Looking Statements & Non-GAAP
Forward Looking Statements & Non-GAAP Forward Looking Statements: This presentation contains estimates, predictions, opinions, projections and other "forward-looking statements" as that phrase is defined in the Private Securities Litigation Reform Act of 1995. Such statements include, without limita
Slide 3: Table of Contents
Table of Contents 2023 Outlook and Strategic Plan Update Page 4 Franchise and Markets Page 6 The WSFS Franchise Page 7 Lines of Business Page 11 Selected Financial and Performance Metrics Page 18 Balance Sheet Composition Page 19 Commercial Loan Composition Page 20 Deposit Cost Trends Page 21 Intere
Slide 4: 2023 Outlook – Core Key Metrics
2023 Outlook – Core Key Metrics1 Full-Year Core ROA2 Outlook of +/-1.50% and Core PPNR %2 of +/-2.30%; Delivering growth from our unique market position and diversified business model 2023 Core Outlook2 Mid-single digit growth; Loan Growth Driven by diversified loan portfolios Deposit Relatively fla
Slide 5: 2022-2024 Strategic Plan
2022-2024 Strategic Plan1 Committed to delivering sustainable high-performing top-quintile ROA Core Return on Average Assets2 Opportunity 1.70% Outlook Target 1.60% Risk 1.50% +/-1.50% 1.41%3 1.40% +/-1.40% 1.30% 1.32% 3 Opportunities: Loan and Fee 1.20% Growth 1.10% Risk: Excess Liquidity runoff, h
Slide 6: Franchise and Markets
Franchise and Markets re Financial. Corporation
Slide 7: The WSFS Franchise – Diversified Business Model
The WSFS Franchise – Diversified Business Model1 Locally-positioned Banking and Wealth Franchise, with several Nationwide Businesses Regional National • Consumer • Wealth and Trust • 92 branches serving Pennsylvania, Delaware, and New Jersey with over • Serving all 50 states and internationally; ove
Slide 8: The WSFS Franchise – Strategic Opportunity
The WSFS Franchise – Strategic Opportunity Largest locally-headquartered bank in the Delaware and Greater Philadelphia region • $19.9 billion in assets • $64.5 billion in combined AUA1 and AUM1, including $7.6 billion in net AUM • 119 offices, including 92 banking offices • One of the largest ATM ne
Slide 9: The WSFS Franchise – Diversified Fee Revenue
The WSFS Franchise – Diversified Fee Revenue 36%2 27%2 27%2 29%2 28%2 $270 $257 $7 $240 • Well-diversified with over 25 discrete $56 $210 lines of business and products within $181 our three main segments: Banking, Core Fee Revenue ($mm)1 $180 $169 $161 $23 Wealth Management, and Cash $11 $69 Connec
Slide 10: The WSFS Franchise – Growth & Performance
The WSFS Franchise – Growth & Performance Millions 1 This is a non-GAAP financial measure and should be considered along with results prepared in accordance with GAAP, and not as a substitute for GAAP results. See Appendix for reconciliation to GAAP financial information 2 2022 Core ROA is adjusted
Slide 11: Commercial Banking
Commercial Banking Local, relationship-focused lending including cash management, wealth management, and private banking services Business Banking Middle Market Comm. Real Estate Small Business SBA Lending Revenues: Revenues: Revenues: Revenues: Profit: $3 million – $30 million+ $20 million – $250 m
Slide 12: Consumer Banking
Consumer Banking Relationship-focused community banking model with 92 banking offices & 686 ATMs1 Branch & ATM Network Digitally Active Banking Lending Mortgage Offering a full range of Approximately 150K digitally Providing Customers with a Meeting Customers’ Locations across Delaware, mortgage pro
Slide 13: Wealth and Trust
Wealth and Trust A Full-Service National Wealth Franchise; 6th largest amongst full-service banks under $100B in assets1 >50% $175mm 10,000+ 1,200+ 405% Core Fee Revenue Advisory 5yr BMT of DE TTM Revenue2 Institutional Clients outside of region Relationships Account Growth Private Wealth BMT of DE
Slide 14: Wealth and Trust Performance
Wealth and Trust Performance Diversified fee revenue with 66% from non AUM-based product lines Total Segment Revenue ($mm)1 4Q 2022 Core Fee Revenue $200 $175 $150 Account-based $86 $100 $73 $71 41% $63 AUM-based 34% $50 $0 2018 2019 2020 2021 2022 Transaction- based Private Banking 1% AUA and AUM (
Slide 15: Cash Connect®
Cash Connect® Leading National Provider of Cash Logistics and Services • Oldest and second largest vault cash provider in the ATM industry; approximately $1.7 billion in vault cash supplied or supported at 12/31/2022 ATM Vault Cash • ~34,000 non-bank ATMs & smart safes in all 50 states1 “Bailment” •
Slide 16: NewLane Finance
NewLane Finance Micro & Small Ticket Commercial Equipment Financing Background: • Co-founded in 2017 by industry veterans, each 21,000+ ~$29K 8.9% with over 20 years of experience1 Small Business Average deal size 4Q Origination Yield Market Size: Customers • Micro & Small Ticket Equipment Leasing i
Slide 17: Strategic Partnerships
Strategic Partnerships Partnering with industry leaders for product diversification, knowledge, and technology best-practices Timeline 2013 – Current 2015 – 2017 2016 – Current 2017 – 2021 2020 – Current 2021 - Current Digital mortgage Digital lending Mobile multi- solution specializing Online perso
Slide 18: Selected Financial and Performance Metrics
Selected Financial and Performance Metrics 18
Slide 19: Balance Sheet Composition
Balance Sheet Composition1 Asset Composition Funding Composition $19.9B $11.8B 26% $16.1B 73% 22% Assets Net Loans2 YOY Asset Growth Deposits3 Loan-to-Deposit YOY Deposit Growth Construction 9% Commerical Money Market Commercial Leasing Mortgage & Savings 5% 36% Net Loans 28% Residential 59% Mortgag
Slide 20: Commercial Loan Composition
Commercial Loan Composition Granular C&I, CRE, and Construction Portfolios C&I and Owner-Occupied - $4.4 billion CRE Investor and Construction - $4.4 billion Wholesale, 4% Special Use & Other, Flex, Warehouse, Self-Storage, Professional, Science & 9% Other, 17% General Industrial, 9% Tech, 4% Food S
Slide 21: Deposit Cost Trends
Deposit Cost Trends $18 0.82% 0.8% $16 0.7% 0.65% $14 $6.4 • Well-diversified deposit base with more than 50% of our deposits outside of Average Customer Deposit Cost (%) 0.6% Average Customer Deposit ($b) $12 0.47% Consumer banking 0.62% $4.0 0.5% $10 • $2 billion coming from Wealth 0.47% $2.8 Mana
Slide 22: Interest Rate Risk
Interest Rate Risk1,2 WSJ Prime @ 7.50% Balance Sheet Drivers 12-Month IRR BPs change NII Impact (%) NII Impact ($) • High % of variable/adjustable rate to total loan portfolio: ~55% -100 (6.8%) ($55.1 million) • Approximately half of variable rate loans tied to 30- -50 (3.3%) ($26.4 million) day LI
Slide 23: Credit Risk – Concentration Management
Credit Risk – Concentration Management Office CRE Portfolio1 Concentration Limits2: • $668.2 million or 5.7% of loan portfolio3 • Disciplined and conservative lending and concentration • $1.7 million average loan size • 11 relationships over $10 million each limits • 79% Suburban and 21% Urban (of w
Slide 24: Credit Risk – Performance Trends
Credit Risk – Performance Trends Criticized & Classified Loans / Tier-1 + ACL1 Delinquencies2 / Gross Loans1 60% 1.2% 50% 1.0% 0.8% 40% 0.6% 0.51% 30% 0.4% 21.44% 20% 0.2% 14.29% 10% 0.0% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 4Q17 1Q
Slide 25: Capital Management – Bank Ratios
Capital Management – Bank Ratios Tier 1 Leverage Ratio Common Equity Tier 1 Capital 22,000 12.5% 2,150 16% Millions ($) Millions($) 20,000 1,950 14% Millions 10.29% 12.86% 18,000 10.5% 1,750 16,000 1,550 12% 14,000 1,350 8.5% 10% 12,000 1,150 10,000 950 8% 8,000 6.5% 750 6% 6,000 550 4,000 4.5% 350
Slide 26: Capital Management – Ownership Alignment
Capital Management – Ownership Alignment $250,000 $0.60 $0.56 $0.52 • Executive management incentive $0.47 $0.48 $0.50 compensation and equity awards aligned with shareholder performance Annual Dividends Paid per Share $200,000 Capital Returned ($ in 000s) $0.42 $0.40 • Insider ownership1 is approxi
Slide 27: Recognitions and Total Shareholder Returns
Recognitions and Total Shareholder Returns Engaged Associates, living our culture, enriching Total Shareholder Returns1 the communities we serve 300% “Top Workplace” sixteen #1 “Best Big Banks” in years in a row and #6 in Delaware; Newsweek 250% 2022; The News Journal 200% “1st Ranked Bank in Delawa
Slide 28: WSFS Mission, Vision, Strategy, and Values
WSFS Mission, Vision, Strategy, and Values 28
Slide 29: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information 29
Slide 30: Non-GAAP Information
Non-GAAP Information This presentation contains financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). This presentation may include the following non-GAAP measures: • Adjusted Net Income (non-GAAP) attributable to
Slide 31: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information For the year ended December 31, For the year ended December 31, (dollars in thousands) 2012 2013 2014 2015 (dollars in thousands) 2018 2019 2020 2021 2022 Net Income (GAAP) $ 31,311 $ 46,882 $ 53,757 $ 53,533 Net interest income (as reported) $ 246,474 $ 444,
Slide 32: Appendix: Non-GAAP Financial Information
Appendix: Non-GAAP Financial Information Three Months Ended Twelve Months Ended (dollars in thousands, except per share data) December 31, 2022 September 30, 2022 December 31, 2021 December 31, 2022 GAAP return on average assets (ROA) 1.69% 1.44% 1.45% 1.09% Plus/(less): Pre-tax adjustments1 0.03 0.
Slide 33: Stockholders or others seeking information may call or write
Stockholders or others seeking information regarding the Company may call or write: WSFS Financial Corporation Investor Relations WSFS Bank Center 500 Delaware Avenue Wilmington, DE 19801 302-504-9857 stockholderrelations@wsfsbank.com www.wsfsbank.com Rodger Levenson Dominic C. Canuso Chairman, Pres